All those headlines about the questionable quality of our state school systems? I agree with them, but not for most of the usual reasons.

Back in the dark ages of the last century when I was in high school, I remember taking things like geometry, chemistry, biology and a foreign language of some kind which remained foreign to me for the entire year I suffered through it. The only things that have been useful to me since graduation are English and typing and if I had to pick one over the other, it would be typing.

Things like punctuation and sentence structure were taught pretty well in junior high and the basics of the verbal part I pretty well learned soon after I decided it was more convenient to walk than crawl. I’m still learning English, I learn new words every time I pull out in front of somebody in traffic. I’ve also learned some sign language from that.

I don’t know if it’s still taught, but one of the subjects on our report cards was “deportment”. I don’t know if that’s still something that’s taught or graded, but if it is, there seem to be a huge number of students who failed it massively.

Like English, deportment was one of the things most of us first learned at home. Our parents may not have been able to help much with Algebra, but they were good at teaching deportment, ‘cause it came under the category of learn it or else. We might get away with only a good scolding for a poor grade in Algebra, but bring home a failing grade in deportment and you’d find out quickly what “for else” meant.

The one thing we weren’t offered was the study of money. The post WWII years were one of the most productive periods in our history, but our parents were children of The Great Depression and didn’t quite trust it. They didn’t throw money around and they didn’t think about whether to save money for retirement, they just did it.

But the Baby Boomers mostly didn’t learn that lesson, unfortunately, and financial responsibility is not much being taught today, although it sure should be. The war taught our parents – The Greatest Generation – the seriousness of life. The Baby Boomers probably just thought the world would blow up, since as little kids, we practiced Atom Bomb Alarms where we were taught to fold up into a little ball next to our little desks. Might as well rebel, boycott haircuts and at the extremes of rebellion and according to the words of Dr. Timothy Leary, “Turn On - Tune In -- Drop Out”.

If we didn’t blow up, we were gonna stay young forever and change the world, so why worry about old age. Didn’t work that way, of course, so we either cut our hair or went bald and went looking for a job, allowing us to buy more toys, build larger houses and probably waste more money than any other generation. And the Boomer savings rate is abysmal.

If we worked for Enron, Eastern Airlines, Grant’s Department Stores and many other names which have disappeared into bankruptcy and then disappeared completely, many Boomer’s retirements disappeared with them. Too many Boomers spent too much money on too many toys to save anything beyond the “company plan” and will suffer for turning the responsibility for their retirement over to others.

Today, people at the front of the Baby Boom are passing 60, many of them already panicking because meager savings and Social in-Security won’t be enough to make their house and car payments at the time in their lives when their parents had likely paid off those things.

Other than having lived through it, my qualifications for this social commentary are limited and what’s the point of all this, anyway? Just this: If schools don’t start teaching children early and often about fiscal responsibility, there won’t be much fiscal responsibility, ‘cause I don’t think today’s kids and young adults are learning those lessons at home any better than their parents did, from what I see in the real estate and rental business.

In just two words, here’s my recipe for security and retirement income: Real Estate. Not just any real estate, but residential real estate in the form of single family houses, starting with one to live in. Houses have always been a solid investment, ASSUMING THEY ARE CAREFULLY CHOSEN AND BOUGHT FOR THE RIGHT REASONS. Over-financing a house to live in with the idea of selling for a profit before the loan eats your bank account is NOT investing, it’s gambling.

If there’s one good thing to come out of the current messy economy, maybe it will be to kill the desire to keep up with the Jones’s or to BE the Jones’s. Trophy houses are expensive and if the owner had to over-borrow to afford it, it’s just a false front. Buy what is affordable based on income, finance it with a long-term, fixed-rate loan, try to make a down payment and expect to hold it long term, meaning at least five years while it builds significant equity.

Retirement income is often fixed while everything else goes up, so the next retirement step is to find a retirement plan with value and income that keeps pace with rising costs, preferably one with some tax advantages and no restrictions on drawing the income from the investment now, instead of having to wait until a certain age. Ideally, you should have the option to cash in this investment after the first few years and retrieve your money, if that becomes necessary.

Like all great investments, there is some risk which can be minimized by having the right investment advisor (Realtor) and there is some work which can be handled by a (property) manager at a reasonable fee, a small price to pay for the results. Obviously, I’m talking about rental property in the form of a single-family house, something a majority of the adult population wants and needs.

“But what about negative cash flow,” I’ve been asked. “What if it’s vacant and I have to make the payment myself?” And I answer that a mortgage payment is sorta like an enforced savings account, since it goes to reduce the mortgage, plus the interest portion of it is deductible, so it’s not like the payment is wasted.

But think about it, a regular 401(now 201) K payment is also negative cash flow and while you don’t have to worry about leaky plumbing in a 401 K, you’ll never be able to convince a tenant to live in one of those and pay rent, either.

Mike Hill has been in the real estate business in Valdosta since 1976 and despite what anybody says, he’s having too much fun to retire.

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